Session 265

Performance Effects of CSR and Non Market Strategy

Track D

Date: Tuesday, October 6, 2015

Track M

Time: 15:45 – 17:00

Paper

Room: Governor's Square 10


Session Chair:

  • Sanjay Patnaik, George Washington University

Title: Corporate Social Responsibility and the Allocation of Procurement Contracts: Evidence from a Natural Experiment

Authors

  • Caroline Flammer, Boston University

Abstract: This study examines whether corporate social responsibility (CSR) influences the allocation of procurement contracts. To obtain exogenous variation in companies' social engagement, I exploit a quasi-natural experiment provided by the enactment of state-level constituency statutes, which allow directors to consider stakeholders' interests when making business decisions. Using constituency statutes as instrumental variable (IV) for CSR, I find that companies with higher CSR receive more procurement contracts. The effect is stronger for more complex contracts and in the early years of the government-company relationship, suggesting that CSR helps mitigate information asymmetries by signaling non-opportunistic behavior and trustworthiness. In addition, I find that the effect is stronger in competitive industries, indicating that CSR can serve as a differentiation strategy to compete against other bidders.

Title: Estimating the Effect of Non-market Strategy on Firm Performance: Hostile two Firm Interactions in the Non-market Environment

Authors

  • Sanjay Patnaik, George Washington University

Abstract: This paper analyzes the effect of non-market strategy on firm performance. Based on a conceptual two-firm game where a firm attacks a target firm through the deployment of non-market strategies, I examine the link between non-market strategy and performance through an event study analysis. By using a novel and unique empirical setting, I demonstrate that an attacking firm can significantly impact the performance of the target firm negatively through strategic non-market actions. Moreover, my findings show that the attacking firm can realize performance gains through those attacks by combining its non-market strategy with an appropriate market strategy. This study contributes to our understanding of the performance implications of non-market strategy.

Title: Is Target CSR used as Signal in Acquisitions? Its Effect on Acquisition Premium

Authors

  • Gunae Choi, Rutgers University
  • Petra Christmann, Rutgers University
  • Ajai Gaur, Rutgers University
  • Tae-Nyun Kim, The College of New Jersey

Abstract: We examine how a target firm’s corporate social responsibility (CSR) and social irresponsibility (CSiR) ratings affect the premium that acquirers pay for targets. Drawing on signaling theory, we argue that information about a target’s CSR and CSiR ratings can send positive or negative signals about not just its social responsibility performance but also about its overall quality. We propose that target’s CSiR reduces the premium that acquirers pay for the target while the opposite is true for target CSR. We also suggest that the effects of CSR and CSiR on premium are more pronounced for acquisitions characterized by higher levels of information asymmetry. Our results based on a sample of 215 cash-only acquisitions announced by U.S. firms between 1995 and 2013 broadly support our arguments.

Title: Isomorphic Pressures on the Deviance from the Norm: The Case of Corporate Social Performance

Authors

  • Nara Jeong, Washington State University
  • John Cullen, Washington State University

Abstract: This paper addresses the remaining questions on why and how corporate social performance (CSP) influences corporate financial performance (CFP). Based on isomorphism perspective, we examine how the deviance from the norm influences on the corporate financial outcome. Also, we introduce contingent effects on the relationship between deviance CSP and CFP - liability of newness and smallness. The expected contributions of this study on the relevant literature are discussed.

All Sessions in Track D...

Mon: 11:15 – 12:30
Session 257: Explaining CSR: Internal Factors
Mon: 13:45 – 15:00
Session 258: Explainng CSR: External Factors
Tue: 11:00 – 12:15
Session 260: CSR Challenges
Tue: 15:45 – 17:00
Session 265: Performance Effects of CSR and Non Market Strategy

All Sessions in Track M...

Sun: 08:00 – 09:15
Session 49: Stakeholder Strategy and Corporate Growth
Sun: 09:45 – 11:00
Session 48: On Teaching CSR as a Strategic Management Topic
Sun: 11:15 – 12:30
Session 47: On the Emerging B Corp Phenomenon and the Future of Capitalism
Sun: 17:45 – 00:00
Session 322: Stakeholder Strategy Business Meeting
Mon: 08:00 – 09:15
Session 39: Who is a stakeholder?
Mon: 11:15 – 12:30
Session 34: New Explanations of Contextual Differences in CSR
Session 244: Legitimacy, Stakeholders, and Competition
Session 257: Explaining CSR: Internal Factors
Mon: 13:45 – 15:00
Session 37: Political Ties: Knots or Bows?
Mon: 16:45 – 18:00
Session 42: The Word is Out! Stakeholder Responses to Public Signals of Firms' Behaviors
Session 89: Integrating Theories of Stakeholders, Ownership, Governance and Boards
Tue: 08:00 – 09:15
Session 43: First Principles in Creating Value: Stakeholder Theory
Tue: 11:00 – 12:15
Session 260: CSR Challenges
Tue: 14:15 – 15:30
Session 44: What's New? Intersecting Stakeholders with Entrepreneurial Industries, Firms, and Organizational Forms
Tue: 15:45 – 17:00
Session 46: Accidents, Disasters, and Stakeholder Demands
Session 265: Performance Effects of CSR and Non Market Strategy
Tue: 17:30 – 18:45
Session 90: Stakeholder Strategies in Emerging Markets


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